IBM earnings in the fourth quarter of 2020

IBM shares fell 6% in extended trading on Wednesday after the company reported fourth-quarter revenue lower than analysts’ expectations.

Here’s how IBM performed:

• Earnings: $ 2.07 per share, adjusted, compared to $ 1.79 per share as expected by analysts, according to Refinitiv.
• Returned: $ 20.37 billion, compared to $ 20.67 billion as expected by analysts, according to Refinitiv.

Revenue fell 6% on an annualized basis, the fourth consecutive quarter of decline, according to a statement. The company has sought to expand into cloud computing and artificial intelligence under the leadership of new CEO Arvind Krishna, but the drop in revenue has also disrupted its predecessor, Ginni Rometty.

IBM’s cloud and cognitive software segment, which includes Red Hat, generated revenue of $ 6.84 billion, down about 5% year-over-year. That’s lower than the FactSet consensus estimate of $ 7.18 billion.

The Global Technology Services unit posted revenue of $ 6.57 billion, down 6% and below the FactSet consensus of $ 6.92 billion.

Global Business Services, which includes consulting, contributed $ 4.17 billion, down about 3% and more than the consensus of $ 4.08 billion.

Systems revenue of $ 2.50 billion, from mainframe and other hardware sales, fell 18% and below the consensus estimate of $ 2.26 billion. The company compares it with a period when systems revenues grew from a new mainframe.

The company’s earnings per share fell 66%, the largest decline in three years, in part due to a $ 2.04 billion pre-tax charge on structural stocks in the quarter.

The company has not released a formal profit forecast, but said it expects revenue growth in 2021, along with free cash flow of $ 11 billion to $ 12 billion.

During the quarter, IBM announced plans to split its Managed Infrastructure Services division, which offers web hosting and web software, into a separate public company by the end of 2021. This plan represented the first major change for IBM since Krishna replaced Rometty as CEO in April. This division is currently part of Global Technology Services.

Also in the quarter, IBM said it agreed to buy cloud consulting service provider Nordcloud for an undisclosed amount.

Excluding the after-hour move, IBM stock is up around 5% since the start of 2021, while the S&P 500 is up around 3% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. EST.

This is the latest news. Please come back for updates.

WATCH: Gary Cohn joins IBM as Vice President

Nominations are open for 2021 CNBC Disruptor 50, a list of private start-ups using cutting edge technology to become the next generation of large public enterprises. Submit by Friday, Feb.12 at 3 p.m. EST.